UPDATE 1-EasyJet, Lufthansa still keen on Alitalia

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MILAN, July 20 (Reuters) - EasyJet and Lufthansa are still interested in Alitalia after an Italian minister said this week the government wants the majority of the loss-making carrier under state control, the British and German carriers said.

EasyJet, Lufthansa, and budget carrier Wizz Air submitted expressions of interest earlier this year in at least parts of Alitalia, but the lengthy formation of a new anti-establishment government in Italy, which finally came to power in June, delayed the process.

New Transport Minister Danilo Toninelli said this week there was a need for 51 percent of Alitalia to be kept in Italian hands “but with a strong investor next to it ... (Alitalia) needs to return to being a true flag carrier”.

Lufthansa has repeatedly said that the Italian market is important for it but that Alitalia must be restructured before it would invest.

A spokesman said the German company had already submitted a document to this effect to the new government. “We can imagine further talks on this basis,” he said on Friday.

EasyJet CEO Johan Lundgren said at the Farnborough Airshow this week that the company remained interested in parts of Alitalia but needed to study the details of what the new government is proposing.

Alitalia, once a symbol of Italy’s post-war economic boom but struggling to compete against low-cost carriers and high speed trains in recent years, was put under special administration last year after workers rejected its latest rescue plan.

Italy’s Deputy Prime Minister and Minister of Internal Affairs Matteo Salvini has said Alitalia was well-placed to return to profitability and “if there are serious private partners, so much the better”.

“The only think we won’t allow is a break-up (of the company),” he said.

However, sector analysts remain dubious that the government will find an investor willing to put money into an Alitalia in which the state has a say, especially given past political meddling that has failed to return the company to profitability.

“Even if the state takes only a minority stake in Alitalia, no investor will dare getting close given what happened in the past,” said Andrea Giuricin, CEO of TRA Consulting and author of “The endless privatisation of Alitalia”.

Repeated state bailouts have cost Italian taxpayers around 10 billion euros over a decade, Giuricin estimates, yet the airline’s situation remains precarious: the carrier is losing at least one million euros per day, he added.

In the first quarter, Alitalia posted an EBITDA loss of 117 million euros ($136 million) compared with a loss of 228 million a year earlier.

Alitalia’s commissioners are due to meet government officials on July 27. The government appointed three commissioners last year to assess whether Alitalia can be restructured, either as a standalone company or through a partial or total sale, or else liquidated. ($1 = 0.8579 euros) (Reporting by Agnieszka Flak in Milan, Victoria Bryan in Berlin, Sarah Young in London and Alberto Sisto in Rome; Editing by Adrian Croft)